The worst situation to be in trading Futures or options is having one contract. You have little flexibility with your exiting decision. 

Fortunately, with many micro contracts in Futures to select from even smaller account holders can trade multiples. This gives you the flexibility to “scale out” of the trade one contract (or more) at a time. 

Ultimately, your size is a function of your acceptable risk. How much you’re willing to lose when you stop out will determine your size. Trading micro contracts, if you’re willing to lose $120 on a trade and the per-contract risk is $30, then your size is obviously 4 contracts. 

The challenge you have with day trading is market noise. The bigger picture trend may look smoother than the trading timeframe chart. Sometimes that "noise" will stop you out prematurely. One way to mitigate this is to set an initial high probability profit target as your first exit. Call it a “risk management profit target.” It gives you a little win, reduces your ris...

Yesterday’s results: No trades suggested.

Today’s Best S&P Futures Turning Points: Buy 6155 stop 6150.75 if price retraces down from above. No short level today. (Filtered out during FOMC volatility). 

The World Index: (+100/-100) jumps from -14 to +36 with most major world markets Bullish on mild volatility. 

Catalysts: Building Permits & Housing Starts @ 8:30. Crude Oil Inventories @ 10:30. FOMC Statement @ 14:00, Press Conference @ 14:30. 

Quick Tip: Trading FOMC

The pattern tends to be range-bound before the announcement and volatile during and afterward. This should help with your trade selection and planning. In fact, if you have solid historical data on your strategy’s performance during FOMC day that is negative, not trading at all may make sense. 

The announcement releases at 2PM ET. You might think the highest volatility is within the 30-minute interval afterward. Historically, it’s the next 30-minute interval when the press conference begins.

When should you trade? Af...

Yesterday’s results: Shorting 6035.50 stopped out. Buying 5988.00 offered 8.25 points before reversing. 

Today’s Best S&P Futures Turning Points: No great levels today. 

The World Index: (+100/-100) falls from +21 to -29 with most major world markets mildly Bearish on low volatility. S&P futures slightly higher. 

Catalysts: S&P Home Price Index @ 9:00. Consumer Confidence, New Home Sales & Richmond MFG Index @ 10:00. FOMC Minutes @ 14:00.  

Quick Tip: Big Picture 

Regardless of your trading timeframe, daily, swing, or position, using a “big picture” analysis to your entry decision adds edge. It’s the higher timeframe. 

Traditional technical analysis suggests that a multiple of 3 to 6 is appropriate. For example, if you’re a day trader using a 5-minute chart for your entry, aligning with the trend of the 15- or 30-minute chart will help. A swing trader using a daily chart would align with the weekly chart. 

Consider this: if you’re using your entry timeframe trend change to exit ...

Yesterday’s results: : Shorting 6032.75 caught the high of the session and ran for 25.50 points before closing the day +19.00. 

Today’s Best S&P Futures Turning Points: Buy 6037.50 stop 6034.75 if price retraces down from above. No short candidate today. 

The World Index: (+100/-100) dips from zero to -7 with the major world markets diverging, Asia is Bearish, the west is Bullish, range is increasing. 

Catalysts: PPI & Jobless Claims @ 8:30. Fed’s Barkin @ 9:00, Powell @ 15:00. Crude Oil inventories @ 10:30. 

Quick Tip: Second Chances

Yesterday’s short entry was effective three times. The expected sellers were clearly active. Historically, the first touch works best. Subsequent touches while still tradable, have less probability of success. 

Why? Because every order initiated from the sell side reduces the number of contracts available for sale. Eventually there are no big sellers remaining. 

I recall listening to a trading instructor years ago explain Support and Resistance. He...

Yesterday’s results: No trades triggered. 

Today’s Best S&P Futures Turning Points: Buy 5996.50 stop 5992.75. Short 5993.50 stop 5997.25 if price retraces up from below. 

The World Index: (+100/-100) plummets from +36 to -71 with all major world markets Bearish on rising volatility. 

Catalysts: Fed Speakers today: Waller @ 10:00, Barkin @ 10:15, Kashkari @ 14:00, Harker @ 17:00, Barkin @ 17:30. 

Quick Tip: Diversify Re-Defined

One of our teams day-trades in the futures market. There is plenty of focus on the S&P 500 contract. Yesterday it traded in a relatively narrow range (31.75 points) and closed down 8 points from Friday. The other indexes weren’t very different. Ho hum. 

Our other team swing trades options. You might think that given the lack of movement in the indexes that the options portfolio would be flat too. It wasn’t. In fact, there were specific options that moved substantially. My portfolio of 20 positions was up 12% for the day reaching an all-time high. 

Surprisi...

Yesterday’s results: Buying 5867.75 picked the bottom of the session and ran for 29.75 points at the close. 

Today’s Best S&P Futures Turning Points: Buy 5908.75 stop 5903.75 if price retraces back from above. No short suggestion today. 

The World Index: (+100/-100) eases from -36 to -29 with most of the world mildly Bearish on lower volatility. 

Catalysts: Richmond MFG Index & Fed’s Harker @ 10:00. BRICS Summit starts, IMF day 2. 

Quick Tip: Fear Not

Looking at the chart above how price was approaching the buy level you might feel like you were stepping in front of a freight train. Confidence in your strategy is required. 

Of course, since you knew the entry well beforehand a set/forget order would have been a good solution to any fear you might have watching price approach live. 

The stats should help with your fear as well. This strategy has a history over 5000 trades, stopping out only 32% of the time. 

The winners will require open trade management skills to eke the most o...

Yesterday’s results: Buying 5888.50 picked the bottom of the session and ran for 25 points. 

Today’s Best S&P Futures Turning Points: Buy 5908.50 stop 5904.25 if price retraces down from above. Short 5864.75 stop 5868.50 if price retraces up from below. 

The World Index: (+100/-100) jumps from zero to +43 with most of the world Bullish. Asia up strong. 

Catalysts: Building Permits & Housing Starts @ 8:30. Fed’s Waller @ 12:10. 

Quick Tip: Dividend Plays? Really? 

As traders we’re usually focused on capital gains, not holding stocks over the long term and collecting dividends. However, having a dividend producing portfolio is a fabulous way to balance your wealth growth relative to the ups and downs of active trading. 

John Bogle, founder of Vanguard Group, said “Over the long run, it is dividends, and dividends alone, that account for the lion’s share of stock market returns." 

Warren Buffett was a huge fan as well: "The best investment you can make is in a business that has a d...

Yesterday’s results: No trades triggered.  

Today’s Best S&P Futures Turning Points: Buy 5789.50 stop 5786.25. Short 5787.00 stop 5790.25 if price retraces back up from below (filtered out during CPI release). 

The World Index: (+100/-100) rises from zero to +21 with sentiment mixed with Asia somewhat volatile, not so much the west. 

Catalysts: CPI & Jobless Claims @ 8:30. Fed’s Cook @ 9:15, Barkin @ 10:30, Williams @ 11:00. 30-Year Bond Auction @ 13:00. 

Quick Tip: Multi-Strat 

Yesterday’s price action did not trigger any trades in the S&P futures for two of our strategies, Volume Profile and Volatility Reversal. Plenty of patience is required when day trading and not getting a quality setup. 

Fortunately, we also trade an intraday Trend/Momentum strategy that ran for 38.25 points (see chart above). It’s not uncommon for the strategies to diverge. Market conditions change and so should your choice of strategy. 

We did utilize the Volume Profile levels to our advantage, however....

Yesterday’s results: Buying 5781.50 picked the bottom of the session and ran for 26.75 points just before the close. 

Today’s Best S&P Futures Turning Points: No high-probability levels today. 

The World Index: (+100/-100) dips from +86 to +57 with all major world markets Bullish except the S&P futures. 

Catalysts: PCE Price Index @ 8:30. UofM Consumer Sentiment (revised) @ 10:00. Fed’s Bowman @ 13:15. 

Quick Tip: Trailing Stops

The technique of adjusting your stop loss so it follows or “trails” price while moving in your direction is attractive. There are several ways to place a trailing stop. The first decision you must make is whether you want your platform to automatically adjust it or you to manually adjust it. 

For automatic trailing stops any decent trading platform will allow you to enter the trailing stop by points, dollars or percentage. If your initial stop was 4 points away, let that be the trailing stop. Simple, but that doesn’t adjust for volatility changes. 

If yo...